Piracy

Google, the Internet’s lone  superpower, increasingly governs its borderless virtual geography like a supranational virtual state, with the power to increasingly arbitrage actual nations’ sovereignty.

“Cyber systemic risk” is Internet-driven risk that threatens to destroy the business viability of industry ecosystems.

While cybersecurity risk may be the familiar and recognizable type of cyber systemic risk, it is only recognizable like the tip of an iceberg is recognizable, because most cyber systemic risk lurks well out of view, deep beneath the surface in the ocean of virtual ones and zeros.

“Cyber systemic risk” generally is the Internet version of the financial crisis’ hard lesson of “systemic risk,” where the world learned that risks or disruptions to one or a few financial institutions could cascade to become risks or disruptions to the broader financial ecosystem. That’s because the inherent inter-linkages and inter-dependencies of financial institutions’ debt and liquidity exposed the then underappreciated fragility of the interwoven financial system.

The financial crisis exposed the need and the requirement for corporations to be more vigilant concerning enterprise risk management (ERM). Consequently the next crisis exposing enterprise risk is less likely to happen from a replay of known financial systemic risks, but from new unappreciated or ignored cyber systemic risks.

Cyber systemic risk is arguably more serious than financial systemic risk. That’s because the Internet inherently is: the most inter-linked, inter-dependent, intermediary system ever created; an insecure and un-private system; and more centralized and concentrated at the top than the financial ecosystem.

Why is the world’s leading crusader for openness and transparency so closed and non-transparent?

Why does Google fiercely defend the public’s right to know virtually everything about everyone else, but does not believe the public has any right to know similar things about Google?

Why is Google passionate about discovery of the world’s information, but so fierce in fighting legitimate discovery of Google information?

In the coming months, Google, and to a lesser extent, Facebook and Apple are on a collision course with American and foreign law enforcement over their pervasive, law-evasive, encryption of Internet traffic by default, which increasingly means law enforcement with a legitimate court-ordered-warrant, cannot search a Google, Facebook, or Apple users’ communications to investigate, prevent and prosecute terrorism or felony crime.

All three, to different degrees, are seeking to regain user trust lost by Snowden’s exposure of ubiquitous NSA spying, by deceptively trumpeting their encryption of traffic as a panacea for privacy vulnerabilities.

[Please don’t miss the summary below of that encapsulates how more pervasive, law-evasive, encryption is not a privacy/security panacea but a grave threat to both public safety and the global free and open Internet we know today.]     

EU officials, who believe normally-big-fines by themselves will be enough to deter Google’s illegal antitrust and privacy abuses, are making a profound miscalculation about what actually motivates and deters Google.

Google’s leadership is not motivated primarily by money, but overwhelmingly by the power and influence of “changing the world” by scaling most every facet of data, computing, and connectivity, first and fastest.

Google’s leadership understands the Internet marketplace is really a simple first-mover race to scale -- and that any fines along the way, without serious limits on Google’s power, are insignificant nuisances.       

Google is unlike any other company EU law enforcement has confronted.

After successfully taming the FTC and the DOJ via the intimidation of politically placing seven former Google executives or consultants in senior positions in most every major federal policy or law enforcement area of legal or commercial interest to Google Inc., Google has turned its intimidation modus operandi on the only American law enforcement arm that apparently remains willing to investigate and enforce the law when it comes to Google – state attorneys general.

The latest example of Google’s well-established pattern of callous corporate irresponsibility and willful blindness is reporting by the Washington Post that: “If you search Google Maps for the N-word, it gives you the White House.”

Tellingly, Google’s corporate policy of crowd-sourcing without curation/corporate supervision of Google Maps systemically yields racist labels for innumerable places per Danny Sullivan’s analysis of the pervasive problem at MarketingLand.  

Just when Google needs it most, its political bag of tricks to dodge antitrust enforcement may be running out.

Reports that the EC is likely to issue a Statement of Objections ruling soon -- that Google is >90% dominant in search and search advertising and has illegally abused that dominance by promoting Google’s content and demoting competitors’ content -- indicates Google finally may be facing a global antitrust inflection point.

A tough EC SO would be a game-changer for Google, like the 2000 U.S. District Court case that ruled Microsoft an anti-competitive monopoly, proved to be a game-changing, global antitrust inflection point for Microsoft.  

Substantively on the merits of the EC antitrust case, Google appears to have little room to maneuver. The EC effectively agrees with the FTC’s staff antitrust conclusions per the leaked FTC staff report. That finding is highly problematic for Google because: EU competition law is much tougher than America’s; Google’s relative >90% market dominance in Europe is much greater than in the U.S.; and Google doesn’t have the dominant political influence over Europe that it does with the U.S. Executive Branch.

The FTC’s politically messy closure of the FTC-Google antitrust investigation in 2013, chronicled in “Googlegate: the FTC Cover-up Evidence Piles Up,” is not the only major Federal investigation into Google’s business practices that Google’s political influence appears to have made go away in 2013.

On February 26^th, the FCC executed President Obama’s call to “implement the strongest possible rules” to regulate the Internet as a telephone utility under “Title II” of the Telecommunications Act.

Legally, the result of this “reclassification” was for President Obama and the FCC to assert regulatory jurisdiction over the Internet ecosystem, creating a de facto American “Digital [Internet] Single Market” industrial policy, like the European Commission is in the process of creating for the European Union.

Legally, America now has a single digital telecommunications/Internet market/ecosystem because the FCC is effectively reclassifying Internet traffic as Title II telecommunications and Title II is a holistic, end-to-end, 1934 regulatory regime designed for the FCC to decide most everything in the assumed monopoly telecommunications ecosystem from originating and terminating local access, long distance, phone and network equipment manufacturing, directories, etc.